Vivo Energy’s revenues in the Kenyan market dipped by $84 million (Sh10.8 billion) in the year ended December 2024, marking the second consecutive year of a drop pointing to a fall in fuel sales.
Disclosures by the parent company show the oil firm, which is the retailer of Shell-branded fuels and lubricants, booked revenues of $1.47 billion (Sh190.3 billion) in the period, compared to $1.55 billion (Sh243.8 billion) in 2023 using the exchange rates for the relevant reporting periods.
This was the second successive year of revenue drop from the $1.79 billion (Sh220.8 billion) made in 2022, and points to the impact of increased competition from rivals and a near stagnant demand of fuel in the economy.
The fall in revenues coincided with a marginal drop in the market dominance of Vivo Energy after its share fell to 21.34 percent compared to 22.07 percent at end of 2023, as rivals ate into its market.
Vivo Energy cited declining revenues across its markets last year, attributing them to a range of factors that included higher prices of fuel and commercial customers shifting to alternative energies among others.
“Policies or technology shifts that result in an increased share of electric vehicles and hybrids in the passenger transport mix, alternative fuel uptake, improvements in internal combustion engine efficiency or reduced consumer demand for fuels,” Vivo Energy says in the disclosures.
Oil firms in Kenya and other markets are faced with a new challenge of the increasing use of electric and gas-powered motor vehicles, amid a global transition to clean energy.
Rivals such as Rubis and the locally owned fuel stations increased their market last year to 15.96 percent and 14.98 percent respectively from 14.05 percent and 12.22 percent respectively in 2023.
Fuel consumption in the six months to December 2024 rose 7.3 percent to 2.9 billion litres compared to the 2.71 billion litres in the same period of 2023.
Increased demand for fuel meant higher sales for the oil companies. However, rivals ate into the dominance of Vivo Energy, undoing the anticipated impact of growing demand.
The shilling significantly strengthened to the dollar last year which combined with a rise in fuel sales, setting the stage for improved revenues.
Oil firms had in 2023 taken a major hit on their revenues due to the sharply depreciating shilling.
This is because they needed more of the local currency to convert to the equivalent of dollars and euros —the reporting currencies for the international oil companies operating in Kenya.
Kenya is the third biggest market for Vivo Energy in Africa, behind Morocco and South Africa. Revenues in Kenya accounted for 8.9 percent of the $16.47 billion that Vivo Energy made in all African markets last year.
Kenya is the only market in Africa where Vivo Energy revenues took a dip, even as the combined revenues from the continent rose 49 percent to $16.47 billion last year from $11.01 billion in 2023.
Vivo Energy has presence in 28 African countries and had a retail footprint of around 4,000 fuel stations at the end of last year.
